Quite contrary to the popular belief, it is easy to get a bad credit personal loan. There are several specialist lenders out there in the market catering to the requirements of such borrowers. However, it is not easy to find a lending solution that offers you the interest rates and terms that you are comfortable with. This is what makes things difficult for the borrowers who have a poor credit history or have experienced bankruptcy within the last two years.
Sources to get a Bad Credit Personal Loan at low interest rates and terms
There are very few sources to get genuine personal loans when you are not keeping up well with your credit score. The best you can do is to look for the sources that can be trusted and have interests and other charges that you can comfortably afford to pay along with the principal. Some ideas well worth of trying may include the following:
- Credit Unions: They are a good source of fund as the interests they charge are very competitive. They are registered organizations and exist solely for the purpose of bringing financial benefits to their members. They tend to look at you more personally than a bank will ever do. You only need to prove that you have a genuine need and are capable of paying the loan. The downside is that the services of a credit union are accessible only to its members and not everybody can become a member of a particular credit union. However, it is not difficult to find one in your neighborhood that you can qualify to become a member of.
- Peer to Peer Lending: This is a new source of personal finance. It is getting popularity because of the simplicity of idea and the ease with which one can lay hands on hard cash. Peer to peer lending is a simple idea where an individual lend money to another in anticipation of a good profit. One can put up a loan request online on a website offering such services and wait for the individual lenders to bid at competitive interest rates. A borrower has a choice to go with the lender that has offered the best terms for the loan.
- Friends and Family: It is an old practice to turn to friends and family in times of financial emergencies. The idea still works. And this could be the best you can get. However, you need to tread cautiously as it can affect your relationship adversely if you fail to pay back or do not keep your promises. It is better to sit together and have a formal agreement regarding payment and interest rates. You need to be extra careful not to hurt the sentiment that your friend and family might have towards you.
- Secured Loans: In case you are in a situation when only a lender can help you out, try to put up something of value against the amount of loan you are borrowing. This will have a positive effect on your lender. They will be more willing to process the fund and you are likely to get a better rate and term. The technical term used to describe the thing you want to pledge is known as collateral, which could be anything that covers the amount of loan.
- Co-Signer: The lender has no issue advancing a personal loan to anybody who has a good credit. If you do not have a positive credit report, then you can seek the assistance of a friend or family whose credit score is acceptable to the lender. Such a person is known as a co-signer. However, it is very difficult practically to find a co-signer who is willing to assist. This is because of the fact that your co-signer share the same responsibility towards repayment as you do. In the case of non-repayment or default, his/her credit would suffer and they would also be chased by the lender for the payment of balance amount.
Can there be other sources of bad credit persona loans? If you have suggestions, use the space below to share your knowledge.